India Slashes Scotch Whisky Tariff in Landmark Trade Deal with UK
Scotch import duty cut from 150% to 75% under new UK–India Free Trade Agreement, with further reductions to follow. Industry forecasts £1 billion export boost.
In a major win for British whisky exporters, the United Kingdom and India have agreed to slash the punitive 150% import duty on Scotch whisky and gin as part of a long-anticipated Free Trade Agreement (FTA). The tariff will fall to 75% immediately when the deal enters into force—expected in early 2026—and decline further to 40% by the tenth year.
📈 Sign up for our free whisky newsletter to stay informed on global trade developments and market trends.
Key Takeaways
Scotch import duty in India will drop from 150% to 75% on implementation, then to 40% by year 10.
The Scotch Whisky Association forecasts £1 billion in additional exports over five years.
UK–India FTA expected to support 1,200 new jobs in the UK spirits sector.
India’s whisky market exceeded 250 million nine-litre cases in 2024, but Scotch held only a 2% share.
Analysts estimate shelf prices for mid-range Scotch could fall by 30%, widening access.
The agreement also grants visa quotas for Indian chefs, musicians, and yoga instructors.
What’s in the Deal for Whisky?
The FTA was signed on 6 May 2025 after over three years of negotiation. According to the UK Department for Business & Trade, the agreement represents the UK’s most significant post-Brexit trade achievement. The immediate halving of India’s Scotch tariff from 150% to 75% is set to make premium and boutique Scottish whiskies far more competitive in the world’s largest whisky-consuming nation.
The final tariff will be reduced to 40% by year ten, though the detailed step-down schedule remains to be published. The SWA welcomed the reduction, calling it “a once-in-a-generation breakthrough” and projecting that the changes could generate up to £1 billion in additional exports and support over 1,200 UK jobs.
India: A Whisky Giant, Under-Tapped by Scotch
India consumed over 250 million nine-litre cases of whisky in 2024, yet Scotch whisky accounted for just around 2% of that total—largely due to the prohibitively high import duties.
In 2024, Scotch exports to India were valued at £248 million, according to figures from the Scotch Whisky Association. This represents just under 5% of global Scotch export value, which exceeded £5 billion last year.
How Much Could Prices Drop?
Analysts estimate that a standard bottle of mid-tier Scotch currently priced around ₹5,000 (roughly £47) could fall to ₹3,500 as soon as the 75% tariff applies. Further reductions may follow as the tariff moves down to 40%, though prices will still vary based on regional excise duties across Indian states.
The expected price shift is anticipated to accelerate premiumisation trends, allowing more Indian consumers to trade up and giving smaller Scottish distilleries a viable entry point into a previously unaffordable market.
Beyond Whisky: A Broader Trade Boost
The FTA delivers benefits across several UK export sectors, including cars, aerospace components, cosmetics, and medical devices. India, in turn, will gain duty-free access for 99% of its goods entering the UK—including textiles, jewelry, and food products.
The agreement also establishes a visa quota for up to 1,800 Indian chefs, musicians, and yoga instructors per year. Services chapters were limited, and no mutual recognition provisions for legal or financial services were included—these are expected to be negotiated separately.
According to UK officials, the treaty covers 90% of UK product lines and aims to make 85% of them tariff-free within 10 years.
What Happens Next?
The treaty must now pass through formal ratification processes in both countries. In the UK, this includes the 21-sitting-day scrutiny period under the Constitutional Reform and Governance Act (CRaG). India requires Cabinet approval followed by a joint-house parliamentary vote.
Officials expect the agreement to enter into force in Q1 2026. That’s when the 75% tariff will take effect, with the 40% final rate set for year 10.
UK Prime Minister Keir Starmer described the deal as “the most significant trade pact since leaving the European Union,” while Indian Prime Minister Narendra Modi called it “ambitious and mutually beneficial.”
📧 To receive your weekly whisky industry news roundup, sign up for our free whisky newsletter.
Share on social media
